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An apparent power struggle inside the Mubarak regime is sending out a bizarre set of mixed signals just when the country needs - and the international community is demanding - a clear and peaceful transition of power.

On Thursday, for example, pro-Mubarak thugs continued to attack pro-democracy protesters in Tahrir Square, and the army and secret police cracked down on foreign reporters, even as the new Prime Minister, Vice-President and President Hosni Mubarak himself were meeting with journalists and offering a conciliatory approach to ending the country's political crisis.

Perhaps even more significantly, the state prosecutor announced that travel bans have been placed on two former cabinet ministers and the country's most powerful steel baron on suspicion of corruption and public-funds embezzlement.

"We're seeing the transition to democracy take shape right before our eyes," a highly experienced Western diplomat said, referring to the corruption investigation and the regime's overture to the opposition. "These things would not have happened before."

But if that is the direction the leading troika is taking, why the heavy-handed thuggery by the regime's agents?

"There are a lot of guys around the President who have a lot to lose if he steps down," explained an Egyptian businessman familiar with the inner circle. "They're fighting to keep him in power.

"They also feel tremendous resentment at the way they and their security forces were treated," the businessman said, referring to the humiliation of the police a week ago when they were replaced by the army and not allowed to deal as heavy-handedly as they wanted against the protesters.

"They were looking for some revenge.

"The people around the President are divided between those who favour the conciliatory approach of [Vice-President Omar]Suleiman, and [Prime Minister Ahmed]Shafiq, and those who favour the tough-guy approach," he said. "The result is a kind of carrot-and-stick approach."

The carrot side, however, appears to be growing, perhaps because of the recent backing of influential members of the business community.

The first sign has been the remarkable crackdown on former ministers of the last government and leading members of the ruling National Democratic Party.

The ministers are former interior minister Habib al-Adly, former housing minister Ahmed el-Maghrabi (a property developer and hotelier) and former tourism minister Zuhair Garana (a travel company executive).

All had their bank accounts frozen and were forbidden from travelling outside the country, as did Ahmed Ezz, chairman of Ezz Steel, Egypt's biggest steel producer and a senior official of the ruling NDP.

Another indication has been the rare press conference given Thursday by Egypt's new prime minister, Mr. Shafiq. Striking a conciliatory tone, he apologized for what he considered to be the inexcusable assault on protesters Wednesday and Thursday, and he announced that the new interior minister should not obstruct peaceful marches Friday during what protesters have dubbed the "Friday of Departure."

Among the day's most astonishing developments was Vice-President Suleiman's invitation to the Muslim Brotherhood to be among the opposition groups entering into negotiations over Egypt's future and the transition to democracy. It was a startling concession to an outlawed organization that the regime has labelled its worst enemy.

However, Mohamed Katatni, a senior Brotherhood leader, reacted suspiciously to the invitation, repeating the group's official position that "the only way Egyptians will accept to hold a dialogue with Suleiman is after Mubarak's departure."

Keeping up the conciliatory approach, Mr. Suleiman addressed the pro-democracy protesters: "We thank you for what you did. You are the spark which ignited reform in this period."

As for the brutal attack on those protesters just hours before, he said: "We will know who did that and there must be harsh punishment … It created anarchy and wasted the great effort President Mubarak is making for the past period."

But now, he said, it was time for the people to go home.

"Lift the protest, your demands have been met."

Mr. Suleiman, the man who would be president if anything happened to Mr. Mubarak, was asked about the President staying in office. He replied: "We all respect the leader, Hosni Mubarak, and what he has offered the country over the past 30 years and the service he has rendered."

For his part, Mr. Mubarak told a journalist he was "fed up" with being President.

"After 62 years in public service, I have had enough. I want to go," he said in an interview with Christiane Amanpour of the U.S. television network ABC.

But, he explained, "if I resign today, there will be chaos."

"I don't care what people say about me. Right now I care about my country," he is reported to have said. "I care about Egypt."

To U.S. President Barack Obama, who has demanded an immediate transition of power, the Egyptian leader said he told him: "You don't understand the Egyptian culture and what would happen if I step down now."

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